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Competitive Bidding in Auctions with Private and Common Values

Author

Listed:
  • Jacob K. Goeree

    (California Institute of Technology)

  • Theo Offerman

    (CREED, University of Amsterdam)

Abstract

See the article with the same title in the 'Economic Journal' (2003), 113, 598-614. The objects for sale in most auctions possess both private and common value elements. This salient feature has not yet been incorporated into a strategic analysis of equilibrium bidding behaviour. This paper reports such an analysis for a stylised model in which bidders receive a private value signal and an independent common value signal. We show that more uncertainty about the common value has a negative effect on efficiency. Information provided by the seller decreases uncertainty, which raises efficiency and seller's revenues. Efficiency and revenues are also higher when more bidders enter the auction. This discussion paper has resulted in a publication in The Economic Journal , 2003, 113(489), 598-613.

Suggested Citation

  • Jacob K. Goeree & Theo Offerman, 2000. "Competitive Bidding in Auctions with Private and Common Values," Tinbergen Institute Discussion Papers 00-044/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000044
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    References listed on IDEAS

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    More about this item

    Keywords

    Auctions; inefficiencies; information disclosure; competition;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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